Subscribe to Entrepreneur for $5
Subscribe

Why ArcBest (ARCB) Stock is a Must-Have in Your Portfolio

Trucking rates are rising amid supply-chain disruptions and elevated demand. This bodes well for the trucking stocks, including ArcBest (ARCB).

By
This story originally appeared on Zacks

ArcBest ARCB has been on a tear, courtesy of its share price performance. The stock has surged 184.9% over the past year, outperforming its industry’s 57.6% rise.

- Zacks

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s look into the factors aiding this currently Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Upward Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 23% upward over the past 60 days. For 2022, the consensus mark for earnings has moved 26.3% north in the same time frame. The favorable estimate revisions reflect brokers’ confidence in the stock.

Given the wealth of information at their disposal, it is in the best interest of investors to be guided by brokers' advice and the direction of their estimate revisions. This is because the same serves as an important parameter in determining the stock price.

Healthy Revenues Boost Amid Pandemic: The Zacks Consensus Estimate for fourth-quarter 2021 revenues is pegged at $1.09 billion, suggesting 33.3% growth from the year-ago quarter’s reported figure. Similarly, the consensus mark for 2022 revenues stands at $4.62 billion, hinting at an 18.41% increase from the prior-year reported figure.

ArcBest’s Momentum Score of B further highlights its short-term attractiveness.

Solid Industry Rank: The industry to which ArcBest belongs, currently has a Zacks Industry Rank of 26 (of 250 plus groups). Such a solid rank places ARCB in the top 10% of the Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.

A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.

Other Bullish Factors: Improving freight conditions in the United States bode well for ArcBest. Solid customer demand and higher market rates are supporting growth at ARCB.

With persistent supply-chain woes and high demand, trucking rates are increasing. This augurs well for the trucking stocks, including ArcBest. ARCB’s earnings trumped the Zacks Consensus Estimate in each of the preceding four quarters, the average being 27.4%.

Other Stocks Worth a Look

Investors interested in the Zacks Transportation sector may also consider C.H. Robinson CHRW and Landstar System LSTR.

The long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. CHRW benefits from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021, with higher revenues across all the segments.

CHRW’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has moved up 12.4% in the past year. C.H. Robinson currently carries a Zacks Rank #2 (Buy).

The long-term expected earnings per share (three to five years) growth rate for Landstar is pegged at 12%. LSTR is benefiting from the gradual economic mend and improved freight market conditions in the United States.

LSTR’s earnings and revenues rose significantly since the third quarter of 2020 owing to robust revenues in its primary segment truck transportation. LSTR has surged 31.6% in the past year. Landstar carries a Zacks Rank of 2, presently.



5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

ArcBest Corporation (ARCB): Free Stock Analysis Report

 

C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report

 

Landstar System, Inc. (LSTR): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research